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jeudi 14 novembre 2013

THE REAL HEROES OF THE GLOBAL ECONOMY

Economic policymakers seeking
successful models to emulate apparently have an abundance of choices nowadays.
Led by China, scores of emerging and developing countries have registered
record-high growth rates over recent decades, setting precedents for others to
follow. While advanced economies have performed far worse on average, there are
notable exceptions, such as Germany and Sweden. “Do as we do,” these countries’
leaders often say, “and you will prosper, too.”

Look more closely, however, and you
will discover that these countries’ vaunted growth models cannot possibly be
replicated everywhere, because they rely on large external surpluses to
stimulate the tradable sector and the rest of the economy. Sweden’s current-account
surplus has averaged above a whopping 7% of GDP over the last
decade; Germany’s has averaged close to 6% during the same period.

China’s large external surplus –
above 10% of GDP in 2007 – has narrowed significantly in recent years, with the
trade imbalance falling to about 2.5% of GDP. As the surplus came down, so did
the economy’s growth rate – indeed, almost point for point. To be sure, China’s
annual growth remains comparatively high, at above 7%. But growth at this level
reflects an unprecedented – and unsustainable – rise in domestic investment to
nearly 50% of GDP. When investment returns to normal levels, economic growth
will slow further.